There's been a lot of hype about Office 365, and you might be considering it for yourself, your clients, or your organization. Office 365 is Microsoft's cloud version of Office. You'll connect via the internet, set up an account, make payment, download the appropriate files, and go to work. There are no installation discs. If you decide that Office 365 might be the right step for your organization, be sure to read 10 things you should know about moving to Office 365 by Brien Posey.

IT consultants will probably know all of the technical points in this article, but you might find some new arguments both for and against moving to Office 365.

1. What's the cloud?

The cloud is an industry term for an off-site file hosting service. When working with Office 365 files, you upload and synchronize files with Windows SkyDrive (Microsoft's cloud). If you want to access files from different locations or devices that don't have Office, this works to your advantage. You can also store files locally; your files belong to you.

Most of us have been using the desktop version for years. Office 365 and Office Web Apps are recent additions to the family. Office Web Apps is a free and limited Internet version of Office that's integrated with SkyDrive. You'll use Web Apps to view and edit files on devices that don't have Office installed.

Office 365 is a subscription-based plan that offers Office functionality in the cloud. It's a hybrid (of sorts) between the desktop version and the free web apps. Excuse the marketing hype, but Office 365 offers desktop functionality with web-based convenience supporting multiple devices. That last part is what matters to users and clients.

When I say at the very least, I mean that Office 365 will run, but it will be slow (really slow... really, really slow). Users with older systems might face significant upgrade costs before they can move to Office 365.

4. The subscription costs

A small business with 25 or fewer users can purchase Office 365 Small Business. If you pay by the year, you'll pay $5, payable in an annual fee of $60 (per user). If you prefer to pay as you go, you'll pay $6 a user per month. Small Business Premium includes the desktop version of all the Office apps, for $150 a year per user. If you have more than 25 users, opt for one of the Enterprise versions from $8 to $24 per user (monthly). In a nutshell.

Small Business accommodates up to 25 users.

Midsize Business accommodates up to 300 users.

Enterprise for over 300 users.

Home Premium is available for $9.99 a month ($99.99 a year). You can work with five pcs or Macs, and five mobile devices. Android devices and iPhones will need Office Mobile. Windows Phone comes with Office Mobile and it doesn't count toward the five-device limit.

5. What you'll get

The apps you get depend on your subscription choice. Most PC plans include Word, Excel, PowerPoint, Outlook, Access, OneNote, and even Publisher. The Mac business versions don't include OneNote, Publisher, or Access.

6. Compatible formats

Office 365 files are compatible with Office 2010 and 2013. Office 2007 also works, but you'll lose some functionality. You can use Office Web Apps with these files. Office 2003 users have limited access with an appropriate compatibility pack, but that will end in January 2014.

Office 2013 users considering Office 365 so they can share files with others who don't have Office do not need Office 365. They can save Office 2013 files to SkyDrive and invite others who don't have Office to view them. Invitees don't need a SkyDrive account or Office to view files on SkyDrive (but they will need an invitation).

7. Perks

8. Who needs it?

I can hear the wheels turning. If Web Apps is free, why purchase anything at all? (Nice try!) Web Apps is seriously limited. It's great for viewing. It also offers basic editing and formatting features, but not much else. It isn't a substitute for the desktop version or Office 365. Just remember that Office 2010 or 2013 users don't need Office 365 to work in the cloud. However, if you want the convenience of working with your files on multiple devices that don't have Office, Office 365 is a great addition for you.

Initially, home users might balk at paying $100 a year for Office, but Office 365 Home Premium supports five desktops and five mobile devices. You can't possibly buy that many licenses for less. Office 365 can save multiple-unit families money.

9. Free alternatives

Google Docs is by far Office 365's closest competitor. It's reliable and secure. The free (personal) version is a functional tool that you can use with your business software. However, it isn't a free replacement for business software.

10. Office 365 security

Most organizations considering the cloud worry about security. Office 365 offers the same user-level security options and Trust Center as the desktop version. Rights management Service (RMS) supports encryption and lets you set permissions. Users will have a reasonable amount of security at their level. Offsite, files are saved in specialized data centers where security is a primary concern. In a nutshell, small to medium businesses will have better security using Office 365 than they can (probably) afford on their own.

Here are just a few facts you should know about Microsoft's cloud security.

Kirk Koenigsbauer, Corporate Vice President at Microsoft had this to say about Office 365 security concerns. "...Office 365 supports the most rigorous global and regional standards such as ISO 27001, SAS70 Type II, EU Safe Harbor, EU Model Clauses, the US Health Insurance Portability and Accountability Act (HIPAA), the US Family Educational Rights and Privacy Act (FERPA), and the US Federal Information Security Management Act (FISMA). To meet evolving needs, we also plan to support IPv6 in Office 365 for Government by September of this year, and we're taking steps to soon support Criminal Justice Information Security (CJIS) policies."